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State orders child agency to return $679,000
Friday February 17, 2012, 11:48 PM
BY HARVY LIPMAN
STAFF WRITER
The Record
Print | E-mail The state wants a Paterson non-profit that oversees government-funded child care to repay nearly $700,000 spent on “disallowed” items — including $250,000 for a retirement nest egg for its former executive director.

The state Department of Human Services says 4Cs of Passaic County wasn’t permitted to use state funds for Mary Ann Mirko’s deferred compensation account. As of late 2009, that account was valued at more than $850,000.

The department’s review was limited to 2008 and 2009, but officials said they are continuing to review other years of state contracts with the non-profit.

“The auditor will go through contracts as far back as necessary to reclaim any disallowed costs,” said DHS spokeswoman Nicole Brossoie.

On Jan. 24, state auditors sent 4Cs a letter seeking $679,416 in reimbursements for costs they allege were claimed improperly in 2008 and 2009. In addition to Mirko’s retirement payments, DHS found that the non-profit had charged the state to pay for long-term-care insurance for the spouse of one employee and also had claimed travel expenses that shouldn’t have been covered under the contract.

Brossoie said she didn’t know which employees’ expenses are involved.

As the child-care resource and referral program for Passaic County, 4Cs oversees state and federal child-care voucher programs, runs the county’s referral service for parents seeking child care, maintains the waiting list of families eligible to receive vouchers, runs a training school for child-care workers and provides a range of other child-care-related services.

Formerly known as the North Jersey Community Coordinated Child Care Agency, 4Cs had an operating budget in 2010 of $34.5 million. According to its audited financial statement, all but a few thousand dollars of its revenue comes from state and federal funds.

Until her retirement at the end of January, Mirko was one of the highest-paid non-profit executives in North Jersey. According to the organization’s fiscal year 2010 tax return, her total compensation package came to $359,772 including fringe benefits and deferred compensation toward her retirement.

Board Chairman Keith Darragh said Friday that he wasn’t aware the state had demanded the repayments.

“We have an upcoming board meeting next week, and I will make sure we get the proper information then,” Darragh said. “I really have no comment until then.”

No one answered the phone number listed for Mirko.

This is not the first time her compensation package has been a topic for state regulators. When the Christie administration issued salary guidelines for social services agencies in April 2010, she was one of only a handful of non-profit executives in Bergen and Passaic whose pay was high enough to be affected, even though the cap did not apply to her deferred compensation and other benefits.

She declined at that time to discuss in detail the impact the salary cap would have on the agency, other than to say it would require pay cuts for the non-profit’s top two executives.

The non-profit’s tax filings show that Mirko’s annual compensation packages ranged from $281,721 to $422,529 between 2003 and 2010; during that time, almost all of 4Cs’ funding came from the government.

The Paterson group made deferred-compensation payments into her account each of those years. The value of her retirement plan varied over time because it was invested in the stock market and other holdings. But according to 4Cs’ 2009 audit, it was worth $856,252 as of Sept. 30, 2009.

Until 2008, 4Cs also ran its own child-care centers. But when DHS put out a request for proposals from organizations seeking to become resource and referral programs, it said groups that also provided child care weren’t eligible.

At that point, 4Cs was created as a new non-profit and split off from the North Jersey Community Coordinated Child Care Agency, which continues to operate two day-care centers in Paterson.